Case Comments: Income Tax and the Double Jeopardy Defence: ITC 1825

• Jurisdiction: South Africa
• Author: Lynette Olivier
• Date: 25 May 2019
• Published date: 25 May 2019
• Citation: (2009) 21 SA Merc LJ 279
• Pages: 279-285

Income Tax and the Double Jeopardy Defence:

ITC 1825

LYNETTE OLIVIER

University of Johannesburg

1 Introduction

Although most people understand the need for imposing taxes, this does not

mean that they do not f‌ind it a painful exercise when they have to pay tax.

Paying tax is even more painful if a penalty is imposed. It is thus

understandable that taxpayers will try all possible arguments to get the South

African Revenue Service (‘SARS’) to waive the penalty. One such defence is

the ‘double jeopardy defence’. However, a recent decision by the Gauteng Tax

Court poured cold water on such a defence. An analysis of the decision

indicates that it raises more question than answers.

2ITC 1825

Brief‌ly, the facts in ITC 1825 (70 SATC 68) were that the taxpayer was

charged under s 75 of the Income Tax Act 62 of 1958 (‘the Act’) in the

magistrate’s court for failure to render tax returns for f‌ive years, and paid an

admission of guilt f‌ine. When SARS eventually assessed him, it imposed

additional tax under s 76 equal to twice the amount of the taxes payable under

each assessment. The taxpayer considered that the imposition of additional

taxes after he had paid an admission of guilt f‌ine in respect of an offence

committed under s 75 of the Act infringed his right not to be tried for an

offence for which he had already been convicted, as guaranteed under

s 35(3)(m) of the Constitution of the Republic of South Africa, 1996 (‘the

Constitution’). The Court disagreed and held that s 35(3)(m) was applicable to

a person facing criminal prosecution or called upon to answer a criminal

charge. As the imposition of additional tax under s 76 is an administrative

penalty, no double jeopardy arose where an admission of guilt f‌ine had

previously been paid in respect of the same conduct.

It is submitted that this decision takes too limited a view of the double

jeopardy defence and is likely to be overturned. To understand the judgment it

is necessary to provide some background to SARS’s authority to impose

penalties.

3 Different Types of Penalties

At the time of the judgment, SARS lacked the general authority to impose

administrative penalties for income tax violations: the only remedy then

available to SARS in respect of the provision of penalties was to rely on s 75

279

(2009) 21 SA Merc LJ 279

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